Headspace raised $37M less than two week ago. Other direct to consumer (DTC) behavioral health apps have also raised hefty sums of cash over the past few years, such as Talkspace, Joyable, Ginger.io, and Lumos Labs.

Why is investment in this space so significant? Behavioral health issues are extremely common and costly but also riddled with challenges such as shortage of providers and stigma, making it difficult for patients to access care they need.

It’s definitely a huge issue but whether it can be solved with DTC apps remains to be seen. Most significantly, there is the question of whether a sufficient number of consumers would be willing to pay for an improvement in health. Therefore, a number of companies originally going to the DTC route may also aim to sell into employers, hospitals, and insurance companies.

Selling to healthcare organizations opens up many challenges. In our working with these organizations and evaluating over 75 digital behavioral health solutions, we have found that the most successful digital health companies tend to be the ones that back up their claims with data on improved outcomes and lower costs. And Headspace has already published a number of studies, including results that those using the app demonstrated increased happiness and reduced depression. The company also has over 20 more studies in progress.

For those other companies looking to break into the healthcare market, we expect them to need to follow suit to prove their value in order to gain traction.

More information on our research in behavioral health is available through Healthbox Horizon Scan. Horizon Scan is a platform that helps healthcare organizations source top-tier digital health solutions. Qualifying organizations can receive access to our research by requesting a complimentary trial of Horizon Scan or by emailing horizonscan@healthbox.com for more information.